NEW DELHI (AP) -- India decided on Friday to invite bids from international aircraft makers for 126 combat jets to upgrade its air force's capability at an estimated cost of 420 billion rupees ($10 billion), a Defense Ministry official said.

India is expected to evaluate aircraft built by American manufacturers Lockheed Martin and Boeing, France's Dassault Aviation, Sweden's Gripen-SAAB and Russia's Sukhoi.

The aircraft are likely to be in service for more than 40 years, ministry spokesman Sitanshu Kar said.

"Eighteen aircraft will be bought in flyaway condition and the remaining 108 will be manufactured under license in India," he said.

India -- whose relations with the U.S. remained tense during the Cold War -- currently has no American-made combat aircraft and instead flies Russian-made MiG fighters, British Jaguars and French Mirages.

In 2004, it placed a $1.45 billion order with BAE Systems for advanced jet trainers.

India's defense spending has steadily risen in recent years -- despite relative peace with arch rival Pakistan -- as the country tries to modernize its outdated hardware.

The government raised the defense budget by 12 percent to 960 billion rupees ($21 billion) in fiscal 2007-2008 to support the military's modernization.

I think the Eurofighter Typhoon is also one of the candidates for the contract. Six IAF Flankers are currently deployed to the United Kingdom to fly against RAF Typhoons. I also read the MiG-35 is an option as well..

Quoteadmin :
..."Eighteen aircraft will be bought in flyaway condition and the remaining 108 will be manufactured under license in India," he said.
...

Since some of the aircraft will have to be manufactured in India, according to the article above, what kind of position does this place the American-built aircraft like the Viper and Hornet? I know the F-16 has been produced in Europe, but I'm not sure of the Hornet. I would think not.

I'm not sure about the Finnish and Spanish Hornets. They were probably produced in the USA. The Swiss Air Force Hornets were assembled by RUAG in Switzerland. But those were 'normal' Hornets of course, I guess India might be interested in Super Hornets?